Moving markets today: Nikkei drives Asian markets up, oil and gold prices surge; US Fed’s Powell maintains cautious rate-cut strategy, attention on Fedspeak and US jobs data

The S&P 500 recovered from consecutive declines, registering its first weekly gain amid new data suggesting a softening US economy. Asian markets rallied on Thursday, fuelled by expectations of potential US rate cuts, though the timing remained uncertain, leading to a yen depreciation and boosting Japanese stocks. Oil prices surged due to concerns over reduced supply and geopolitical tensions. Federal Reserve Chair Jerome Powell maintained a cautious stance on rate cuts. Exxon Mobil signalled lower first-quarter profits due to weakened oil and gas prices. Investors remained focused on the Federal Reserve, with several top officials scheduled to speak during the session. Here are five key takeaways for your day.

Powell upholds Fed’s prudent approach to rate cuts

Federal Reserve officials, including chief Jerome Powell, underscored the need for careful consideration before start cutting interest rates. Market expectations suggest potential rate cuts around June.

Powell mentioned that policymakers widely concur that reducing rates may be necessary “at some point this year.” However, they will consider this action only after they are more confident that inflation is steadily decreasing towards the 2 per cent target.

In separate remarks to CNBC, Atlanta Fed President Raphael Bostic suggested maintaining current interest rates until the fourth quarter of the year. Bostic anticipates only one quarter-percentage-point cut in 2024, differing from the expectations of his colleagues, Reuters reported.

Exxon Mobil projects lower first-quarter profits on back of oil and gas price weakness

Exxon Mobil expects lower first-quarter operating results due to reduced oil and gas prices and significant losses in fuel derivatives, as per a recent securities filing. Weak natural gas prices and losses in fuel derivatives, which reversed course after gains last year, are the primary factors behind this decline.

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Operating profit is estimated at $6.65 billion for the first quarter, down from $11.6 billion a year ago and $7.63 billion in the previous quarter. Investors anticipate an adjusted per-share profit of $2.21, compared to $2.83 a year ago, Reuters reported.

Oil prices soar amid supply worries and geopolitical unrest

Oil prices have surged recently due to several factors. Attacks on Russian refineries by Ukraine have disrupted fuel supplies, contributing to the rise. Moreover, concerns have emerged about the potential spread of the conflict between Israel and Hamas in Gaza to involve Iran, which could further disrupt oil supplies from the Middle East.

In a recent meeting, top ministers from the Organization of Petroleum Exporting Countries (OPEC) and its allies, including Russia, decided to maintain the current oil supply policy. They also urged certain countries to increase compliance with output cuts.

Consequently, Brent crude prices increased by an additional 0.37 per cent to $89.68 per barrel on Thursday, while U.S. crude prices rose by 40 per cent to $85.77 per barrel.

What’s coming up

Thursday will see investors closely monitoring the US Federal Reserve, as several of its top officials are slated to deliver speeches. In addition to this, significant economic data, including the eagerly awaited monthly U.S. non-farm payrolls report, is scheduled for release the following day.

Ahead of this, attention will also be on the latest weekly jobless claims figures and Challenger’s report on monthly layoff announcements.

In Europe, the focus will be on the services sector survey results. S&P Global is expected to unveil the March services Purchasing Managers’ Index for the euro area, along with similar survey data for the UK. Additionally, eurozone producer price data for February will be published.

Nikkei leads surge in Asian markets

Overnight, the Dow Jones Industrial Average slightly dipped by 0.11 per cent to 39,127.14 points, while the S&P 500 edged up by the same percentage to reach 5,211.49 points. Concurrently, the Nasdaq Composite saw a modest increase of 0.23 per cent, reaching 16,277.46 points. Notably, key sectors within the S&P 500, including energy materials and communication services, showed notable gains.

Across Asian markets, Tokyo’s Nikkei 225 index surged by 1.7 per cent alongside a decline in the yen. Japan’s Topix index also experienced a significant uptick of 1.6 per cent, while South Korea’s Kospi index rose by 1 per cent. Bitcoin, known for its sensitivity to expectations of interest rate adjustments, saw a 0.6 per cent increase, reaching $66,100.

Meanwhile, gold continued its remarkable ascent, hitting a fresh peak at $2,302 per ounce, marking a substantial 12 per cent surge since the onset of February.

Notably, markets in greater China remained closed due to the Ching Ming tomb sweeping festival.